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One of the earliest decisions a start-up will make is whether it will engage independent contractors or hire employees. Some new businesses prefer to utilize independent contractors to do specific tasks, like accounting functions, because contractors can provide hiring flexibility and cost savings. A business can lower its expenses on […]

Many startups get independent and experienced advice from an advisory board.  Board advisors are typically experienced hands who can help the board of directors fulfill its duties without getting bogged down by the details of company oversight.  Retaining board advisors is a great idea for many companies, but before establishing […]

Because of taxes, the type of entity you have selected for your company may substantially impact the amount of money shareholders take home after sale of the company. The following is a cheat sheet to help you identify the pros and cons of each entity type in light of these […]

Completing your initial equity financing with outside investors is likely to be one of your first experiences in financing your company. Typically, these financings are done with a venture capital firm (“VC”) or with angel investors, and the company sells Series A Preferred Stock. In most cases, a company will […]

Friends and Family – When a company and its founder have exhausted the usual means of generating early financing (that is, maxing out the founder’s credit card and living on a ramen-heavy diet), the company may reach out to the founder’s friends and family. Friends and family have a close […]

Articles of Organization This straightforward document is the company birth certificate. Filing fees and identification of a registered agent will almost always be required in conjunction with the filing of articles of organization. Operating Agreement (a/k/a LLC Agreement in Delaware) A well-drafted operating agreement describes how key business decisions are […]

Articles of Incorporation This is the company birth certificate filed with the Secretary of State of the company’s state of incorporation. It lists the company’s authorized shares and founder(s). Filing fees and identification of a registered agent will almost always be required in conjunction with the filing of articles of […]

Your relationship with the co-founders of your business may substantially impact the running of your business, the growth of your business, and the potential diversions faced by your business. Two hypothetical scenarios may be useful in depicting the impact of this relationship. In the first scenario, your co-founder is your […]

Your business will almost certainly require fine-tuning as you adjust to the many short-term needs, issues, and concerns raised in the first several weeks and months of operation. While it is easy to let these immediate issues dictate your business decisions, you must not lose sight of your long-term business […]

When working with start-up companies we are frequently asked whether it is preferable to form a new entity as a corporation or as a limited liability company. While there is no one-size-fits-all answer to this question, below are some high-level pros and cons of each entity. The attached chart will […]